Why Microsoft’s Mobile Gaming Strategy Is a Mistake

While Microsoft has yet to disclose a date, Windows Phone 7 appears ready to launch this fall. With that news also comes hype surrounding the company’s mobile gaming strategy. BNET.com said Microsoft’s titles “will make Apple fight for mobile dominance,” while Dvice praised the platform’s support for the fun stuff as “a reason why Windows Phone 7 is a must have.” But I’m not convinced embracing mobile games is the right way for Microsoft to jump back into the smartphone race.

Don’t get me wrong: I understand that the guys in Redmond have an impressive arsenal when it comes to the video game world, and the new mobile platform will support Xbox Live, so users will be able to play mobile versions of familiar titles like “Bejeweled” and “Halo” on their phones. Microsoft is also paying developers to port successful iPhone games for Windows Phone usage. The OS will include multiplayer functionality that will eventually (but not at launch) enable gamers to square off against each other at the same time, to see what their friends are playing and to communicate with them.

But here’s the thing: Microsoft’s ever-dwindling base of mobile users doesn’t want that stuff on their phones. And I’m not sure how many other consumers want it either.

Microsoft seems to be making the same mistake that’s plagued game-makers for years: confusing the handset with the console. Mobile gaming, by and large, has failed gain traction because developers simply repurposed console-type games for phones limited by smaller screens and vastly inferior controls. The industry became shackled with overpriced games that delivered a nightmarish experience despite dazzling graphics.

The iPhone gave the industry a much-needed kick in the pants by offering improved controls (in the form of its touchscreen) and a bigger, brighter screen. But that lift has come in the form of simple, casual titles that can be played in a matter of minutes. Most mobile gamers don’t want games like “Halo,” they want Angry Birds. They don’t want to engage with other gamers, they want to get a high score and move on. That’s especially true of the business users that have for years been Microsoft’s bread and butter. That audience grows thinner and thinner As the iPhone and Android continue to gain steam, but the company still claims about 10 percent of the U.S. smartphone market, according to NPD. That’s a sizable chunk to sacrifice in pursuit of an unknown market of gamers.

The decision to focus on gaming is particularly puzzling, considering that the mobile enterprise is ripe for the picking. Business uses are increasingly abandoning enterprise-targeted mobile operating systems in favor of more consumer-friendly platforms; there is a huge opportunity for any player who can combine consumer-friendly features with world-class security and tight integration with corporate computer systems. Yet Microsoft appears to be passing that opportunity up in favor of a game-centric OS. And because it isn’t a manufacturer, it can’t produce the kind of game-friendly hardware that, say, Sony Ericsson is developing for the Android OS.

Look, I understand Microsoft has to make some drastic changes. Windows Mobile is an antiquated platform that can’t hold a candle to iOS or Android when it comes to the user experience. And there’s no denying that support for games and other fun apps is crucial for any mobile operating system in the era of the superphone. But Microsoft seems intent on pursuing what may be a small niche of hardcore, community-minded gamers, a puzzling move for a company whose few successes in mobile have come in the business world.

It’s not that focusing on mobile gaming won’t (or didn’t) help at all, Connie. But in targeting gamers, MSFT went after the limited mobile gaming market that had largely already become iPhone aficionados. And I think it sacrificed a chance to market Windows Phone to the business users who A) have long been MSFT’s bread and butter on the desktop and B) are now largely up for grabs with RIM’s foundering. Pretty sure that crowd wasn’t swayed by WP’s awesome avatars.

It will be interesting to see how MSFT markets WP now that Mango is here. I expect it (and Nokia) will come big with marketing, and I’d bet they don’t hang their hat on the mobile gaming set nearly as much as they did last year.